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PNS Daily Newscast - May 24, 2018

Jared Kushner is finally granted his security clearance. Also on our nationwide rundown: A new lawsuit seeks the release of a gay man from ICE detention in Pennsylvania; and protecting an Arizona water source for millions near Phoenix.

Report: Mortgage Industry Still Sees Things in Black and White

The number of minorities able to access conventional loans doesn't add up to a healthy economy, according to a new report. (GotCredit/flickr)

October 4, 2017

DURHAM, N.C. - Achieving the American dream often comes down to access to capital, and a new report finds that racial disparities continue in access to home loans.

The Durham-based Center for Responsible Lending analyzed 2016 mortgage lending data and found that African-Americans and Hispanics received just 9 percent of the country's conventional loans last year, while their white counterparts were approved for 70 percent of the loans granted.

Nikitra Bailey, the center's executive vice president, explained what an impact it has on people as they try to advance themselves economically.

"We know that many credit-worthy borrowers are in the marketplace," she said. "Many borrowers who have less than prime credit scores are still credit-worthy and they perform well, particularly in a market where a lot of the bad practices have been addressed."

Consumers of color continue to depend on higher-cost, government-backed mortgages from the Veterans Administration and Federal Housing Authority. The Equal Credit Opportunity Act and Fair Housing Act protect consumers against discrimination because of race, but the center and others have argued that standards are so tight following the foreclosure crisis that many creditworthy consumers are denied.

The Urban Institute has estimated that more than 5 million potential borrowers are being locked out because of an overcorrection after the foreclosure crisis. On top of that, African-Americans are at the same level of home ownership rates as they were in 1968. Bailey said the inability to purchase a home has far-reaching impacts on people's lives.

"Home ownership is the cornerstone of how most American families have built their wealth over time," she said. "The home equity is used to finance a business, to help send a child to college or to help one land into a safe and comfortable retirement."

Bailey and other market analysts have said the future of the housing market depends on including underserved borrowers, since existing homeowners need buyers when they want to sell. Harvard University's Joint Center for Housing Studies found that nonwhites accounted for 60 percent of household growth between 1995 and 2015, and predicted that half of the millennial households by 2035 will be nonwhite.